Major Changes in the Environments.
They are going to have to ensure that they keep an eye on the competition. They have been around, doing what they do, for 30 years. Other airlines have started to take note and copy their simple recipe for success. As their competitors grow Southwest could start to see a slow erosion of the existing customer base. .
With the current economic slowdown many businesses have curtailed business travel. This type of travel represents a substantial portion of the daily requirements for the company. Over the summer months vacationers will keep the seats full, especially with gasoline prices at current levels. What will happen once the school year resumes and the economy continues to idle? .
Key Financial Ratios of the firm. .
The many victories within the industry have left Southwest financially strong. The balance sheet is strong, cash flow is up, and the company has an unsecured debt rating of "A". Despite the recent, rapid growth they still maintain the title of the lowest air carrier and are doing so even as they acquire more market share.
2. Management Strategies.
Analysis of the Strategic Issue.
Southwest Airlines began service on June 18, 1971 and has grown to become the 4th largest U.S. airline (in terms of domestic customer carriers). They are the nation's low fare, high Customer Satisfaction airline providing single-class air transportation to short haul cities. Today they operate over 350 Boeing 737 aircraft providing service to 58 airports in 29 states. They have more then 32,000 employees and fly more then 2,700 flights a day while maintaining the lowest operating cost structure in the domestic airline industry and consistently offer the lowest and simplest fares.
Inventory strategies.
One management strategy that has worked for Southwest is that they operate only Boeing 737's. This philosophy significantly simplifies their operations in terms of maintenance, training, scheduling and staffing.